What is natural Monopoly

A natural monopoly is a type of monopoly that arises due to the high fixed costs or start-up costs involved in operating in a particular industry. In a natural monopoly, it is more cost-effective for one single company to provide a good or service rather than multiple companies due to economies of scale.

This typically occurs in industries such as utilities (electricity, water, gas) and telecommunications, where the infrastructure required to provide the service is expensive to build and maintain. In these industries, competition may be inefficient or impractical due to the high costs involved, leading to a single company dominating the market.

Governments often regulate natural monopolies to ensure that consumers are protected from high prices and low-quality services. This may involve price controls, quality standards, and oversight to ensure fair competition.